How to Smash Your Debt with THIS Cash Flow Formula

The strategies around getting out of debt or speeding up your cash flow may seem overwhelming, but I am here to share how we dug our way out of debt, and some of the other things I did to speed up the process. Let me show you how I used this cash flow formula to smash almost six figures of debt!

I just want to say, in my humble opinion, it is not okay to not know what’s going on in your finances. If anything ever happens, you not knowing your finances is not awesome. You don’t have to manage them, but you need to know what is going on. I know I talk a lot about money and wealth and what we’ve created here at The Goal Digger Girl because I want you to know it’s possible – take this from somebody who has had an eviction notice on her apartment door, and somebody who has almost had a vehicle repossessed because I couldn’t make the payments.

I’ve literally been declined to pump gas because I was pulling out every card, and there was nothing left on any of them because I just bought a $200 pair of jeans at the mall. I remember asking my friend, can you cover the gas? And it was awful. I have been there. I say that you know it’s totally possible to turn your situation around. I’ve learned that you can do a couple of different things to change your situation.

A winning strategy.

Let me give you a strategy. If you don’t know your spending right now, this can be really helpful if you’re doing what I used to do and I didn’t really know. I have always handled our finances, I love money and numbers. I would get the credit card statement in the mail, and I paid it off, then I assumed we were okay. No, that’s not a plan. Did I really know how much was going out and how much was coming in? You can’t just go off of your husband making 80 grand a year. Well, there’s taxes, there’s insurance, right? What’s the take-home?

I’ve never been able to stick to a budget. I don’t like budgets and I don’t like the word. I feel like it’s dieting, but I will tell you that we went through the total money makeover. You put the big diet plan together, and then what happens. You’re good Monday, your good Tuesday, and then Wednesday, your coworkers say, let’s go to lunch. And before you know it, you say forget it, and you’ll start back next week. That’s kind of what budgeting is like for me. I would put a budget together, and I wouldn’t follow it. Once you understand the total money makeover, something shifts in you.

Limit your spending and decrease your expenses.

When you decrease your spending, you’re going to know what you’re spending. For us, our biggest issue was when we were getting out of debt, Addison was two when we decided to do this, and Elise was one, and I couldn’t pay $40 a month for dance classes. There was a teacher at her little preschool, so she could see what was happening. She knew that Addison wanted to take dance classes. I didn’t even have $40 to put towards other things. She got a six-month scholarship from the owner, and I promised myself that I would be able to pay for it by the end of the six months. That was a huge driver for me. It seems so silly, doesn’t it?

When we looked at the budget, Scott and I realized it was Amazon. What was happening was he would go on Amazon. I would go on Amazon. Before you knew it, we didn’t know what we bought on Amazon. It’s one of those blackhole things, such as online shopping or grocery shopping. When I used to do all of our cooking, my thing was I would run into the grocery store after work at least two times a week, and I would walk out with $25 at minimum. It’s like Target, and you can’t just walk out with one thing. All those random trips to the grocery store, target, that local store down the street, starts adding up.

Get on the same page.

Decreasing your spending isn’t saying you can’t go do things. It’s just to start to see what you are spending money on. We made the decision that we weren’t buying gifts for each other and we weren’t going on vacation. We were buckling down and getting our debt under control. Finances are your number one priority when getting married or having a partner. You both need to be on the same page because if one of you is trying to save and the other is spending, it will cause tension.

Just like your home, which is good debt, invest in coaching to get you on track. So you can fight me all you want on that side, but I consider that as an investment.

You have to increase your cash flow.

This is where multiple streams of income come into play. Last week I interviewed Sarah, a show performer in Vegas. During the pandemic, her livelihood was gone overnight. Because of what she was learning in our program, she was able to pivot, and she started her own production company, and it’s been going strong ever since.

Multiple streams of income can be layered in multiple ways. It can be getting that promotion at work or deciding to start this coaching business over here. It’s acknowledging where you’re at in your network marketing or direct sales that this isn’t the right fit. You see, the numbers aren’t adding up. You need to increase the cash flow.

Another thing that helped me a lot was talking to Scott and asking about his career path. Is there anything he wanted to get certified in, learn, or whatever? Your partner might have skills that are very valuable in the marketplace. He was able to put himself out there, get four job offers, and take a huge pay increase. That cash flow would have never happened if I didn’t say let’s have a conversation here about our spending. You don’t divide. You come together.

When I realized that he could increase his cash flow at his job, I saw the things I could do – I could replace my income and quit. I knew I could make more without having that job. It’s multiple streams of income, it’s moving companies, it’s looking for a promotion in your corporate job, it’s deciding you are going to launch a course or coaching program. You guys all have gifts that you’re just not using.

Elevate your online presence.

You elevate your online presence making more money because people will see you as somebody with credibility. They see that, and they’re going to want to work with you.

Put both together and TURBO-CHARGE!

Take both of these strategies and put them together. We’re going to decrease the spending, and we’re going to increase the cash flow. You will get to a point where spending isn’t such a thing, but I highly recommend decreasing your spending. I mean expenses on clothes, vacations, going out to dinner, etc. You could reign it in for a little bit. I went from almost six figures of debt to paying it off entirely by doing these things.

But we had to really buckle down for about six months where I wasn’t buying anything. My shoe fell apart at work, and I asked the maintenance guy to use some Gorilla Glue to glue the bottom back on. I was not spending a dollar until we got ahead of this thing. But it won’t be like that forever. We don’t follow a budget now. We’ll have conversations about things and make decisions, but we don’t have this strict plan to follow.

Reign in the spending, increase your cash flow, and before you know, you’re debt-free in a matter of time. What’s so wonderful about being debt-free is that then you can start making really great decisions. We saw that we could buy two and a half acres at the top of the mountain in Angel Fire. We had the cash to buy it, so we made them an offer, and they took our offer right away because we had cash. BOOM! You can do things you haven’t been able to do before. Plus, you just sleep a little bit better at night. So let’s get excited about smashing that debt!

Go crush that debt, Goal Diggers!

If you want to check out this blog in video format, watch the latest #getLIT training!